Note On Organizational Culture

Many people are skeptical of the idea that organizational cultures exert any real effects on individual and organizational behavior. One reason for this suspicion is that people often use the word “culture” as a catch-all category for “the way things are done” in a firm. But “the way things are done” can often be discussed in much more concrete terms by focusing on specific aspects of the formal organization, such as the structure of the incentive plans in place, the formal grouping and linking principles encoded in the formal organizational structure, and the established routines and operating procedures in the firm. This note examines organizational culture, focusing on the effects of strong cultures and how such cultures are created and maintained.